Executive salary packages at Tesco increase by 18%

Boardroom pay at supermarket group Tesco rose nearly 18% last year and chief executive Sir Terry Leahy received nearly £10m in cash and shares.

Leahy, who is paid a basic salary of £1.3m, gained an annual cash bonus of £1.2m and another bonus, paid in shares, worth £1.7m. He was also awarded shares worth £1.2m under the group's long term incentive plan and further tranches of shares worth £4.2m were released to him under a previous incentive scheme.

The chief executive's other benefits include perks worth £95,000. Details of the Tesco directors' pay packages are revealed in the group's annual report.

Tesco recently reported record annual profits of £2.8bn. Group sales were ahead 11.1% at nearly £52bn.

The second highest Tesco earner was Tim Mason, the former marketing director who moved to California to build the group's new Fresh & Easy chain of convenience stores.

Mason, who now lives in Los Angeles, received £4.5m in basic pay and annual bonus payments and benefited from £2.3m of share awards granted in previous years. His basic pay is £938,000 and he received £260,000 "in respect of certain localisation costs, including accommodation and school fees". He has also been given a payment to cover "additional tax due on equity awards made prior to Mr Mason's move to the US".

Lucy Neville-Rolfe, the group's director of legal and corporate affairs, has been catapulted into the highest echelons of female executives and one of the few to earn a salary of more than £1m.

Neville-Rolfe, who previously worked in the Cabinet Office, joined the Tesco board in 2006. She now gets a basic salary of £485,000, boosted to £1.5m after annual bonuses and £1.7m taking into account share payouts from previous years.

All the other board directors earned more than £2m. Finance director Andrew Higginson was paid £2.8m in salary and bonus schemes, plus an additional £2.3m.

Tesco chairman David Reid received £675,000, made up of a basic salary of £581,000 and £94,000 for a chauffeur and car. The total cost of the board, excluding share payouts from earlier years, was £23m, up from £19.6m a year earlier.

Among the non-executives, Carolyn McCall, chief executive of GMG, publisher of the Guardian, received £67,000. She has since resigned owing to a potential conflict of interest after Tesco's legal action against the Guardian alleging libel and malicious falsehood.